Lower-than-expected electricity demand in Germany could cut grid expansion costs - report
Handelsblatt
Lower demand for electricity could substantially reduce Germany’s bill for expanding the power grid to accommodate its growing fleet of renewable power installations, business daily Handelsblatt reported. The expected costs of more than 500 billion euros until 2045 to expand the country’s long-distance transmission (320 billion euros) and short-distance distribution (200 billion euros) grids could end up being about 86 billion euros lower due to electricity demand not being as high as anticipated by the Federal Network Agency (BNetzA), according to calculation by consultancy e.venture. The analysis commissioned by grid operator 50Hertz found that a reduced need for electricity transport would cut costs expected based on Germany’s current grid development plan.
The latest estimate for Germany’s future power demand from 2021 gauged the 2030 demand to reach up to 665 terawatt hours (TWh). However, in 2023, Germany used only 517 TWh, less than the 569 TWh consumed in 2019. Lower electricity demand due to weak output of the country’s industry, lagging investments in electrolysers for hydrogen production, and a slow roll-out of heat pumps and electric vehicles are all diminishing power use.
Moreover, all consumers permanently reduced their overall demand since the height of the energy crisis, when the government promoted savings measures, said 50Hertz CEO Stefan Kapferer. “The next grid development plan should include a scenario in which less electricity is used,” he argued. He added that the fast expansion of solar power could create challenges for grid operators to absorb the additional electricity feed-in, arguing that a slowed connection of new solar panels could further reduce the pressure on grid expansion.
Germany must transform its power grid to better manage the transition away from large and centralised fossil and nuclear power stations towards decentralised wind turbines, solar panels and other renewable power installations. Due to the much higher capacity of wind turbines in the coastal northern states, new power lines are needed to transport wind energy to industrial centres further south and avoid costly curtailing and re-dispatch measures to balance the grid.
